Industry

Industry composition

In 2018, the Insurance Regulatory Authority of Uganda (IRA) licensed 29 Insurance companies (20 non-life/general insurance companies and 9 Life companies), 1 Reinsurance Company,5 HMO’s, 34 Insurance brokers, 1 Reinsurance Broker, 23 Loss Assessors/ Adjustors/ Risk Mangers, 10 Bancassurance Agents and 1,951 Agents.

 

UIA Membership

As at August, 2018, Grand Micro Insurance, Zep Re, ATI and May Fair Insurance had become members of the Uganda Insurers Association.

 

Mr. Paul Kavuma was appointed as the Chief Executive Officer of UIA on 1st August, 2018.

 

Regulation

  • The Insurance Act 2017 was passed in June, 2017. Of note:
  1. Supervision will shift from Compliance Based to Risk based Supervision.
  2. Perpetual licensing will be introduced.
  • Alternative distribution channels were also provided for.
  1. Cash and carry business is now part of the law. This now means that an individual/company has to have paid full premium in order to be covered/insured.
  2. An ombudsman has also been provided for to resolve insurance related disputes.

The IRA intends to engage the industry on the following regulations in August 2018.

  1. The Insurer (Governance) Regulations 2018
  2. The Insurance (Prudential) Regulations 2018
  3. The Reinsurance Regulations 2018
  4. The Insurer Conduct of Business Regulations 2018
  5. The Mobile Insurance Regulations 2018
  6. The Insurance (Training College) Regulations 2018
  7. The Insurance Intermediaries Regulations 2018
  8. The Micro Insurance Regulations 2018
  9. The Micro Insurance Organisation Regulations 2018
  10. The Index Insurance Regulations 2018
  11. The Insurance (Licensing, Suitability and Control) Regulations 2018
  12. The Insurance (Miscellaneous & General) Regulations 2018
  • In the spirit of East African Community integration, an EAC Insurance Bill is under development by the Partner states. It envisions to be a framework law on which the national laws will consequently be aligned to. The Bill is based on the EAC Insurance Policy which was adopted by the partner states. The industry will be engaged on the EAC Insurance Bill in September 2018.

 

  • With the amendments to the Financial Institutions Act which, among others now allows for bancassurance (the selling of insurance products through the bank channel), the bancassurance regulations were passed on 14th July 2017. The IRA also provided guidelines with respect to the removal of the requirement for the agency agreement with 3 non-life and 2 Life insurers per bank. The guidelines also stressed the importance of the banks complying with the Bank of Uganda Consumer Protection Guidelines and ensuring that all insurance products are approved by the IRA. The guidelines are scheduled for review in September, 2018.  14 banks are currently licensed.

 

  • The Motor Third Party Insurance Law Cap.214 is under review to ensure the further protection of clients and address issues extending to compensatory amounts, the compensation process as well as appropriate premium. Motor Third Party Insurance currently operates under the Motor Vehicle Insurance (Third Party Risks) Act 1989.

As this bill continues through the legislative process, the UIA has the initiative to streamline the claims payment procedures. If a client has provided all the required documentation and has agreed with the amount that they will be compensated with, the insurer will pay- particularly for third party claims- within 5 working days. The industry average is actually 2 working days. In 2017 alone, we paid Ugx 35Bn in Motor Claims only.

  • The Workers Compensation Act 2000. An engagement with the Ministry of Gender, Labour and Social Development was held
  1. Developments in the market

 

  1. Mortality study

The Macroeconomic and Financial Management Institute of Eastern and Southern Africa (MEFMI) is currently undertaking the development of mortality tables to be used in the Life and Pensions sector that will streamline pricing of life and pensions insurance products. It is expected that these tables will be completed before the end of the year.

 

  1. The Market Development Plan: the UIA officially launched the sector’s 10 year Market Growth and Development Plan which intends to see insurance penetration grow from less than 1% to 3% by 2025. The Plan intends to bring about increased penetration through streamlining a series of actions and activities under four key intervention areas; increased understanding and appreciation of insurance, lobbying and advocacy, leveraging on technology and capacity building. The Association will work with players who include her members, the Insurance Institute of Uganda, the Insurance Regulatory Authority, Government and her agencies and other private sector partners to implement this plan.

 

  1. It is now a requirement to check for Motor Third Party Insurance as part of the mandatory vehicle inspection checks being carried out by SGS Automotive Uganda (SGS) which should see compliance with this insurance rise in turn boosting both premium and tax revenue collection for the country.

 

  1. The government has committed to continue with the pilot Uganda Agriculture Insurance Scheme (UAIS) program to further subsidize agriculture insurance premiums for both small and large scale farm so as to guarantee the returns expected from crop and livestock farming in FY 2017/18. By the end of March 2018, the Scheme covered 53, 634 farmers with most covered for Multi-peril Crop Insurance, Area Yield Index Insurance and Crop Weather Index.  8 Bn paid in claims had been paid and for the FY 2017/18, utilization of the subsidy, stands at 4.6Bn as at March 30th 2018. We are advocating for zero rating VAT and reduction on stamp duty and working for even greater coverage of the scheme.

 

  1. With respect to Marine Insurance, the Insurance Regulatory Authority of Uganda has been mandated to administratively enforce and implement the provisions in the Insurance Act that makes it mandatory that insurance policies on ships, aircraft or other vehicles registered in Uganda; and on goods imported from other countries, except personal effects and donations be issued by Insurance Companies licensed under the Act. We believe that once implemented, this will be a game changer for insurance in general.

 

  1. The IRA also approved the Oil and Gas Co-Insurance syndicate in 2016 allowing the local industry to actively seek avenues to provide insurance support to our nascent Oil and Gas sector. The engagement with the Oil and Gas sector is on-going.